GE Vows $20b Asset Sales, Sweeping Change

General Electric Co’s new chief executive vowed to shed more than $20 billion worth of assets and hold executives accountable for failing to deliver profits after what he called “horrible” results in the third quarter.

GE badly missed Wall Street expectations and slashed its full-year forecast, sending shares down as much as 6% early on Friday. But the stock rebounded and closed up 1% at $23.83 after CEO John Flannery said he will focus the company on delivering profit and cash to shareholders, Reuters reported.

Investors are pushing for big change after more than a decade of frustration at poor returns from the 125-year-old maker of power plants, jet engines, medical devices and other industrial equipment.

Since former CEO Jeff Immelt took the helm in September 2001, the stock is down more than 40% and has posted a negative return even after reinvesting its juicy dividends.

Flannery, who took over as CEO on Aug. 1, said he would change GE’s culture to hold managers more accountable, demand better performance from the businesses and reduce the complexity of GE’s portfolio.

GE’s good businesses are being held back by others that “drain investment and management resources without the prospect for a substantial reward,” Flannery said on a conference call with analysts. “We will have a simpler, more focused portfolio” in coming months, he said. “We are driving sweeping change.”

Flannery declined to say what is on the chopping block, details he is due to unveil on Nov. 13.

As proof of GE’s new approach to performance, outgoing Chief Financial Officer Jeff Bornstein took the blame for the poor results during the conference call, his last as CFO. “Accountability has to start with me,” he said. “We are not living up to our own standards or those of investors, and the buck stops with me.”

GE reported adjusted profit of 29 cents a share, missing by a wide margin the 49 cents analysts had expected, according to a consensus of estimates from Thomson Reuters.

GE cut its profit forecast for the full year to $1.05 to $1.10 a share, from $1.60 to $1.70 previously, and said it would generate only about $7 billion in cash from operations, down from $12 billion to $14 billion it had forecast earlier. It left its dividend unchanged.